Impag. civi. 5 colori ingl

Transcription

Annual Report
2002
Annual Report 2002
Company Name
Capital Stock
Registered Office
RAI Radiotelevisione Italiana SpA
Euro 500,000,000 fully paid-in
Viale Giuseppe Mazzini, 14 - 00195 Roma
Rai SpA
Corporate Boards
2002 Highlights
Reclassified Financial Statements
Report on operations
4
5
6
8
9
The radio and television sector
10
Regulatory framework
13
Operations in 2002
17
Rai’s activities:
19
- Editorial offer
19
- Industrial activity
26
Audiences
27
Human resources
29
Research and Development
31
Financial review
32
Subsidiaries
38
Other information, main events and outlook
43
Proposed allocation of net income
44
Balance Sheet and Income Statement
Notes to the accounts
Attachments
Report of the Board of Statutory Auditors
Auditing Report
Shareholders’ Meeting Resolutions
Corporate Directory
45
51
97
103
109
113
115
3
Rai SpA
Board of
Directors
General
Manager
Television
Channels 1 and
2 Division
Corporate
Affairs
Services
Television Channel
3 and Related
Offers Division
Radio Division
Television
Production
Division
Divisione Produzione TV
Educational
Notte
Corporate Affairs: strategic activities involving
the whole company
Services: support activities for the editorial and
production areas
4
Rai SpA
Corporate Boards
Board of Directors
from February 22, 2002
from March 7, 2003
Chairman
Roberto Zaccaria
Antonio Baldassarre (1)
Lucia Annunziata (2, 3)
Directors
Stefano Balassone
Adalberto Albertoni
Francesco Alberoni
Angelo Maria Petroni
Secretary
Alberto Contri
Carmine Donzelli (4)
Vittorio Emiliani
Marco Staderini
Giorgio Rumi
Gianpiero Gamaleri
Luigi Enrico Zanda Loy (4)
Marcello Veneziani
Franco Di Loreto
Board of Statutory Auditors
Chairman
Marcello Bigi
from April 1, 2003
Auditors
Bruno De Leo
Salvatore Randazzo
Roberto Chionne (5)
Substitute Auditors Domenico Mastroianni
Ascanio Turco
General Manager
Claudio Cappon
from March 19, 2002
from April 1, 2003
Agostino Saccà
Flavio Cattaneo
Independent Auditors
Deloitte & Touche SpA
(1) appointed Chairman at the Board of Directors’ Meeting held on March 5, 2002
(2) designated Director by the Presidents of the Italian Chamber of Deputies and Senate on
March 13, 2003
(3) appointed Chairman at the Board of Directors’ Meeting held on March 18, 2003
(4) resigning on November 20, 2002
(5) resigning on April 1, 2003
Corporate Boards
5
2002 Highlights
(in millions of euro)
Revenues
1,382.5
1,350.1
1,000
1,000
500
500
2000
2001
0
2002
Income before taxes - Net income
577.2
Gross Operating Margin Operating Income
120
100
500
6
2002
2000
5
2001
0
4
8.4
2000
20
3.9
0
109.8
40
40.7
60
41.4
300.1
320.5
300
47.6
80
400
100
2000
113.3
1,311.1
200
2002
1,500
1,500
600
2001
2,000
2,000
0
2,278.8
2,500
2,242.6
144.9
1,038.5
168,1
1,028.1
2,087.9
2,565.9
161.9
1,167.0
2,500
2,546.3
2,640
3,000
Operating costs
2001
2002
2002 Highlights
Net financial position
Shareholders' Equity
650
36.2
40
35
25
24.3
607.1
20
600
12.6
602.1
608.4
30
625
15
10
575
5
2001
2002
Capital expenditure
2001
2002
271
10,100
339
215.9
180
250
9.901
350
300
2000
Personnel at year - end
366.1
400
0
9.970
2000
10.118
550
108
9,700
9.779
9.790
9.793
200
9,300
53.8
72.3
100
85.8
150
8,900
50
0
2002 Highlights
8,500
2000
2001
2002
2000
2001
2002
7
Reclassified Financial Statement
Reclassified Income Statement in millions of euro
2002
2001
% revenues
Revenues
2,565.9 99.5
Change in inventories and increase in self13.0
0.5
developed assets
Total revenues
2,578.9 100.0
Total operating costs
- 2,278.8 88.36
Gross operating margin
300.1 11.64
Amortization of programs
- 226.2
8.77
Ordinary depreciation
- 100.5
3.9
Other revenues (charges)
35.0
1.36
Operating income
8.4
0.33
Net financial income (expense)
33.4
1.3
Adjustments to the value of financial assets
- 8.2
0.33
Income before extraordinary items
33.6
1.3
Net extraordinary items
7.8
0.3
Income before taxes
41.4
1.6
Income taxes
- 36.4
1.4
Net income
5.0
0.2
% revenues
2,546.3
16.8
99.34
0.66
2,563.1
- 2,242.6
320.5
- 261.4
- 101.0
45.8
3.9
60.1
- 1.7
62.3
- 14.7
47.6
- 43.6
4.0
100.0
87.5
12.5
10.2
3.94
1.79
0.15
2.3
0.1
2.35
0.6
1.85
1.7
0.15
Reclassified Balance Sheet in millions of euro
2002
2001
Variaz.
1,197.4
- 324.7
- 301.8
1,317.0
- 439.6
- 287.9
- 119.6
114.9
- 13.9
Net capital employed
570.9
589.5
- 18.6
Shareholders’ Equity
Net financial position (debt)
607.1
- 36.2
602.1
- 12.6
5.0
- 26.6
570.9
589.5
- 18.6
Fixed assets
Current assets
Employee severance indemnities
8
Reclassified Financial Statement
To our Shareholders:
The current domestic and international economic outlook, as well as the radio
and television sector are affected by a strong downturn. In this context, Rai has
shown a remarkable ability to react.
Rai closes the 2002 financial year reporting a net income of euro 5 million, in
line with the previous year.
In the past two years, the Company’s efforts concentrated on reducing costs to
face the decline in advertising revenues – amounting in 2001 to euro 140
million and remaining stable in 2002 – and high extraordinary charges,
amounting to about euro 90 million in 2002, due to the acquisition of rights
and related costs, on the occasion of the Soccer World Cup and the Winter
Olympics. In addition, Rai has been facing rapid structural market changes,
evident since a number of years, that will affect in a radical way the provision
of the radio and television public service, Rai’s mission and its strategic
positioning in the market.
In this new context, the issue of resources and their financing will be key to the
development of Rai.
Rai’s ability to react effectively will depend largely on the guidelines provided
by its shareholders.
The Draft Law submitted by the Government on “General norms for the radio
and television sector and Rai SpA; Government mandate for the issue of the
radio and television code”, introduces a number of important changes that
will affect Rai.
The fist key issue is the definition of the role of public service in the domestic
radio and television system. Rai is required to make specific commitments in
terms of:
O Internationalization: Rai’s role in the international arena and in the diffusion of
Italian culture abroad.
O Regionalization: consolidation and strengthening of local operations and
regional programs.
O Presence: widening of the offer and availability of radio and television contents
through all current and future generation media.
The second issue relates to Digital Terrestrial Television in which Rai Group is
the leader, with the task of rapidly transforming the television system from
analog to digital broadcasting.
Main aspects of the project include:
O the installation of a broadcasting infrastructure;
O the development of content and of interactive programs to be used on different
media;
O the financing of the project, allocating part of the proceeds from the
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placement of Rai shares in the market to incentives for the acquisition on the
part of licensed viewers of digital receivers.
The last decisive element is the ability of Rai – either directly or through its
subsidiaries – to create value and to remunerate capital. In this context, the
placement of the company’s capital on the market is preferred over the
development of a company that supplies services financed by public funds.
These opportunities require a strong guidance on the part of shareholders and
the sharing of strategic objectives in line with a business plan aimed at
enhancing and developing public service broadcasting, in a medium- and
long-term financially sustainable environment.
Policies and goals that will strengthen this equilibrium are:
O the streamlining and higher selectivity of investments;
O an increase in efficiency;
O a renewed commitment to the reduction of costs;
O the disposal of non-strategic assets to generate financial resources to be used
towards the future development of Rai;
O the revision of Rai’s organization and of its Corporate Governance.
The radio and
television sector
The radio and television sector continues to be affected by a climate of strong
uncertainty caused by the evolution of the entire telecommunications system.
Structural changes can be summarized as follows:
O change in the breakdown of the system’s sources of income. Revenues from
license fees and advertising will remain stable, vis-à-vis the rapid growth of
other revenues, such as pay-TV fees, sale of products, content, licensing and
merchandising, etc.;
O impact of the development of digital technologies on production and
distribution models, the offer and structure of the business;
O the increasing concentration of pay-TV services and the consequent
strengthening of competitive operators, in addition to operators with a
captive audience (attracting advertising);
O growth of segments parallel to the television one, exploiting the potential of
new media platforms (e.g. broadband Internet services), despite uncertainties
regarding the sustainability of the current level of investments;
O change of strategy on the part of operators from a presence in the full range of
the media spectrum, partly through M&A transactions, to the refocusing on
core businesses with a light presence in the new media segment (content
providing);
O internationalization of activities and markets, countering static sales on the
domestic market.
10
Television audiences
In the context of a rapidly increasing offer of communications by images, of
which the Internet is only one of the media used, television retains also in 2002
a key role in the telecommunications system. Audience figures shown below can
help to highlight a number of trends:
2000
2001
9,095
8,915
8,500
8,630
9,000
8,494
9,500
8,848
Average whole day audiences (in thousands of viewers)
8,000
7,500
7,000
6,500
6,000
1998
1999
2002
The growth trend in the number of viewers is positive throughout the day. In
2002, the total audience increases by over 180 thousand (up by 2,1% on
2001), reaching a new maximum point (since 1987, first year in which
audiences were measured through Auditel).
24,518
24,688
24,899
24,525
25,000
24,283
Prime time audiences (in thousands of viewers)
2001
2002
24,000
23,000
22,000
21,000
20,000
1998
1999
2000
Prime time audiences increase by 170 thousand (up by 0,7% on the previous
year), recovering part of the decline registered in 2001.
The above figures thus confirm the central role of television in public preferences.
11
Radio audiences
Radio broadcasting, the oldest mass communications medium, registered very
good results in terms of audiences, with over 35 million listeners for the
average day (representing a 1,2% increase on 2001).
34,998
2000
2001
35,425
35,084
35,000
34,971
36,000
35,523
Radio audiences (in thousands of listeners)
34,000
33,000
32,000
31,000
1998
1999
2002
The strengths of radio are the adaptability of its productions, the wide offer and
the direct and personalized relationship with the listener. These are characteristics
that make radio a fundamental medium for any comprehensive communications
strategy in Italy.
The downturn in the advertising market
The advertising market continues to be affected by the downturn begun at the
end of 2000, despite a slight increase in advertising expenditure. The weak
performance of the market is due to the poor economic climate and the absence
of signs for a recovery of the business cycle in the short term.
Businesses are therefore forced to cut costs to protect profit margins and are
postponing the launch of new products, with a resulting reduction in advertising
spending.
Despite stricter limits to the amount of advertising that may be broadcast by Rai
as compared to its private competitors (a ratio of 1 to 4 in terms of revenues),
the Company registered a 1% increase in revenues thanks in part to advertising
revenues on the occasion of the Soccer World Cup.
The graph below shows total advertising spending for the years 1998-2002.
12
6,000
7,672.2
7,920.4
3,562.6
3,461.1
7,406.8
6,059.9
7,500
6,804.9
Advertising market (in millions of euro)
3,201.8
3,048.8
2,657.5
4,500
4,357.8
4,211.1
4,205.0
3,756.1
3,000
3,402.4
1,500
0
1998
1999
2000
2001
2002
source: A.C. Nielsen
Regulatory framework
Alongside the analysis of trends in audiences and advertising revenues, we
include a review of the regulatory framework for the development of the radio
and television sector.
The legislator deemed it appropriate to regulate the sector due to its being
subject to the issue of an operating license. Regulations aim at allowing the
entry of new operators in the respect of free competition principles, defining the
role of the public broadcasting service and that of private operators, allocating
system resources among operators and safeguarding the principles of pluralism,
correctness and transparency of information.
New norms regulating the sector
Draft Law no. 3184 “General norms for the radio and television
sector and Rai SpA; Government mandate for the issue of the
radio and television code”.
The Draft Law, currently under discussion in Parliament, is aimed at an overall
reform of the Italian radio and television system.
The system is regulated in view of the evolution of the current scenario and in
particular of developments determined by the introduction of digital technology,
able to support higher competition, and of the convergence between television
and other telecommunications media (publishing, Internet, mobile communications,
etc.) towards an integrated communications system.
The Draft Law redefines the role of Rai in the system, with particular reference to
its public service role and the financing and use of public resources in line with
European Union rules.
The Draft Law, finally, establishes a number of rules in favor of free competition
in the sector:
13
O
limits to the broadcasting of television and radio programs. Once the
plan for the allocation of frequencies is fully implemented, no provider of
content may hold licenses allowing it to broadcast more than 20% of total
television programs and 20% of radio programs that may be broadcast on
terrestrial frequencies;
O
limits to revenues from the integrated communications system. Subjects
requiring registration as communications operators may not collect more than
20% of total resources for the domestic integrated communications system.
Law 249/97: Constitutional Court Pronouncement no. 446/2002
On November 20, 2002, the Constitutional Court declared article 3, comma
7 of Law no. 249, dated July 31, 1997 (creation of an Authority for
Communications and norms for the telecommunications, radio and television
systems) unconstitutional.
Barring the introduction of further legislation, the pronouncement involves the
elimination of advertising for RAITRE and the migration to cable or satellite
transmission for RETEQUATTRO and one of the channels distributed by Tele+
by December 31, 2003.
Market and competition
Through resolutions no. 212/02/CONS dated July 3, 2002 and no.
14/03/CONS dated January 9, 2003, the Authority for Communications
resolved respectively to carry out a survey on the distribution of resources in the
television sector for the years 1998-2000 and to initiate an inquiry involving
interested parties to verify the existence of positions that are either dominant
or harmful for pluralism, leading to possible related resolutions aimed at
eliminating such positions or avoiding the establishment of the same.
The role of Rai in the regulatory framework: the Public Service
Rai is the largest radio and television broadcasting company in Italy. Its activity
has significantly affected the life and the way of thinking of our Country in the
Twentieth Century.
A large part of social, cultural, political and current events were reported and
commented over many decades of activity: Rai is by its own right part of the
historical memory of the Country.
14
The development of the radio and television service:
2003 - Signing of 2003-2006 Public Service Contract
1994- Twenty-year Public Service License
1979 - Third channel goes on the air
1977 - Television begins broadcasting in color
1961 - Second channel goes on the air
1957 - TV signal covers the entire Italian territory
1954 - Television broadcasting begins
1924 - Radio broadcasting begins
Pursuant to its public service role, Rai provides:
O national and international broadcasting, ensuring signal quality, the
coverage of the Italian territory and the reaching of Italian communities abroad;
O program quality with the aim of satisfying the widest possible spectrum of
interests and audience;
O full and easily accessible information;
O an educational and cultural role alongside entertainment;
O public services, as required by the Public Administration according to
specific needs;
O access to persons with hearing or visual impairment.
Compliance with obligations of the radio and television public
service
Rai’s public service activities are regulated by a Service Contract with the
Ministry of Communications, renewed for consecutive three-year terms.
On January 23, 2003, the Ministry of Communications and Rai signed the
Service Contract for years 2003-2005 (approved by Presidential Decree
dated February 14, 2003). The contract regulates in detail the mission and
content of the public service provided by Rai.
Main issues include:
O mission of the public service. Article one defines prioritary tasks assigned
to the public service, among which “to ensure a balanced and varied offer of
programs, able to attract a level of audience sufficient to carry out the task
assigned and to ensure a uniform program quality across the various genres
offered”;
O quality. It constitutes a “strategic goal of the public service mission” and, in
this context, the contract requires Rai to “initiate within three months an
internal audit that ascertains the quality level of the television and radio offer”
providing for the creation of a commission in charge of verifying the
achievement of goals set;
O selected audiences. The contract provides for Rai to dedicate particular
15
attention, both in qualitative and quantitative terms, to minors, reserving to
them 10% of scheduling between 7am and 10:30 pm. Rai must also increase
by 10% a year its investment in specific services for persons with hearing or
visual impairments. The contract finally sets criteria for the awarding of local
licenses for the promotion of regional and local cultural issues;
O technology. The contract states that Rai is in charge of “promoting the
industrial development of the country and the introduction of new broadcasting
technologies” through “the conversion to digital terrestrial broadcasting of
programs and multimedia services”.
In 2002, Rai fulfilled all its obligations deriving from the Service Contract.
Among these:
O the commitment to allocate to public service program genres at least 65% of
television programs and 80% of RAITRE, was widely exceeded (78.5% and
93.5% respectively);
O about 24% of license fee revenues were invested in the production of
European audiovisuals (against a minimum share of 20%).
Rai in Europe
Public service broadcasters are present in all countries of the European Union
(one in each Country, with the exception of Germany, with two public service
broadcasters). With the exception of Spain, where the radio and television
public service is financed through public funds, European public services are
financed through the payment by customers of a license fee. In this context, Rai
has the lowest license fee in Europe, accompanied by the highest average
yearly audience share (46.4%).
The table that follows shows main European public service providers. Figures
relate to December 31, 2001, adopted for comparative purposes.
Number of general purpose channels
Satellite channels (2)
License fee (in euro)
Total revenues (in millions of euro)
License fees/Revenues (%)
Average share (%)
Employees (no.)
I
D
3
13
93.80
2,546
51
46.4
9,970
2
11
194
7,180
79
41.8
24,718
UK
2
9
175.28
5,540
82
36.8
24,718
F
E
3
6
116.50
2,180
60
37.2
6,597
2
6
(1)
832
(1)
32.4
9,400
(1) In Spain there is no license fee. The public service
is financed directly by the Government
(2) Number of satellite channels in February 2003
source: www.e-mediamap.com
16
Consistent with its mission, Rai’s programming genres and quality are in line
with other public service providers.
Public service TV offer
100
48
49
52
51
44
60
48
80
60
56
52
40
40
20
0
RAI
ARD/ZDF
BBC
TF
TVE
Operations
Operations in 2002
Rai continued to pursue its cost reduction and investment streamlining policy to
maintain a steady performance and level of debt. Such policy was pursued
since the previous year due to the negative market situation and the need to
safeguard the profitability of the company from the negative repercussions of the
market downturn.
Measures taken:
O a reduction in spending in areas not directly connected with the company’s
core business (Corporate affairs and Services);
O setting of investments at a level in line with the preservation of capital
employed;
O a structural reduction in net operating costs;
O a reduction in costs of subsidiaries to safeguard the competitive stand of the
Group;
O optimization of operations and consolidation of market position;
O redefinition of strategies in the new media sector.
Results achieved:
O steady operating costs, despite the large outlay due to the acquisition of rights
for major sporting events (World Soccer Championship and Winter Olympics,
for an expense of about euro 90 million);
O focusing of investments on projects with a high strategic priority;
O selection of projects concurrent with the definition of the investment plan for
the transition to digital broadcasting (it is to be noted that, pursuant to the
Service Contract, Rai committed itself to submit within three months a plan for
the digital broadcasting of its three networks, together with the related
financing plan).
17
Among non-recurrent operations we note the sale to Groupe Canal+ S.A. of the
entire interest held by Rai in Tele+ as a result of the exercise of the call option
held by the former, at the same price, equal to euro 46.5 million, previously
paid by Rai for the purchase of a 2.55% share in Tele+.
Editorial activity
Rai’s editorial activity in 2002 was in line with public broadcasting service
requirements previously mentioned, relating to programming genres and quality,
pluralistic and comprehensive news, special attention to children protection and
services for viewers with visual and aural impairment.
These characteristics, which contribute in making Rai’s offer unique, represent
irrefutable values and, more importantly, provide creative opportunities of
programming development.
The past year therefore confirmed Rai’s key-role in the country’s cultural and
social development.
Rai’s editorial line developed principally in the following areas:
News: quality, frequency, immediacy, impartiality and pluralism are the
guidelines for news programming. The recovery of TG1’s role as the country’s
leading newscast and the strengthening of TG2, TG3 and of regional information
confirm Rai’s central role in news broadcasting. Also worthy of note is the
important result achieved by Rai.it, leader among Internet news portals.
Focus: Focus programs were high-quality, with an innovative approach to
current affairs and information (with Porta a Porta, Excalibur, Ballarò, etc.).
Children and youth: programming dedicated to children and young viewers
consisted primarily of original formats and contents aiming at promoting the
harmonious development of the individual from childhood to maturity, while the
purchase of low-quality foreign productions (as for example Japanese cartoons)
was reduced to a minimum.
The success of programs such as Disney Club, Art Attack and GT ragazzi
bore witness to the effectiveness of the editorial choice, along with Melevisione,
the long-time favorite of the afternoon schedule.
Social: Rai traditionally provides contents relating to cultural, social and
environmental issues. In keeping with this tradition, 2002 saw the offer of
programs dedicated to the world of employment (with Occupati) and consumer
rights (Mi manda Raitre), and related to health (Elisir), science and technology,
culture (La Grande Storia, Novecento) and the environment (Geo&Geo).
In addition to these programs, popular and high-quality drama provided an
effective way to narrate the history of Italy through the life of great personalities
(the two-part Maria José, Papa Giovanni XXIII, and Perlasca) or fictional
characters that have become symbol-citizens (the series Don Matteo, Il
Commissario Montalbano and Maresciallo Rocca).
Sport: in 2002 Rai was the undisputed leader in the offer of great sporting
events (Soccer World Cup, Winter Olympics, Formula One GPs, etc.) which
required an important financial commitment for the acquisition of broadcasting
rights. During the year it also supported minor sports leagues (tennis, volleyball,
cycling, athletics, etc.) by broadcasting games and other events.
18
The positive results achieved in these programming genres clearly show the
need for Rai to pursue and strengthen viewer fidelity in such areas.
In the programming dedicated to entertainment, the genre in which competition
by commercial channels is strongest, Rai was able to obtain excellent audience
shares with the broadcast of special events and of original programs or continuing
favorites (for example the satirical Chiambretti Show and Caso Scafroglia,
quizzes, and shows hosted by famous artists and personalities such as Roberto
Benigni, Raffaella Carrà, Fiorello, Lucio Dalla and Gianni Morandi).
Editorial Offer
Rai’s activities
Rai offers information, entertainment and public service programs both
nationally and internationally through television, satellite and radio.
Television programming is broadcast via the three national terrestrial
channels (RAIUNO, RAIDUE and RAITRE), via Rai International (the free satellite
channel for Italians abroad), and via the satellite theme channels Rai Sport
Satellite, Rai News 24, Rai Edu Lab 1 and 2, and Rai Med.
Television air-time
2001
Total hours
National broadcasting
RAIUNO
RAIDUE
RAITRE
Satellite transmission
Rai Sport
Rai News 24
Sat Educational
Rai Med
Regional broadcasting
in Italian
in German
in Ladino
in Slovene
in French
%
2002
Total hours
%
8,760
8,760
8,480
26,000
12.9
12.9
12.5
38.3
8,760
8,760
8,486
26,006
12.5
12.5
12.1
37.1
8,760
8,760
8,760
26,280
12.9
12.9
12.9
38.7
8,760
8,760
8,760
2,190
28,470
12.5
12.5
12.5
3.1
40.6
5,746
720
44
288
8.5
1.0
0.1
0.4
5,602
723
45
241
8.0
1.1
0.1
0.4
57
6,855
0.1
10.1
79
6,690
0.2
9.8
8,760
12.9
8,760
12.5
67,895
100.0
70,200
100.0
Int’l broadcasting
Total
Rai’s schedule covers a wide range of program genres, including newscasts,
current affairs, culture, sports and youth and children’s programs. These genres
account for 78.5% of the overall offer and for 93.5% of RAITRE’s offer, figures
that largely exceed those required by the public broadcasting service contract.
Rai Group also offers, through its affiliates, additional programming on new
media channels: seven pay satellite theme channels produced by Rai Sat
19
Television programming by genre
(% breakdown)
(Album, Show, Cinema, Art, Ragazzi, Gambero Rosso and Fiction), two produced
by Rai Trade (Roma Channel and Inter Channel) and a video-on-demand service
offered by RaiClick, accessible on the television set or the computer through a
broadband connection.
Radio programming is broadcast on the four stations RadioUno, RadioDue,
RadioTre and GR Parlamento, nationally and regionally on MW and FM, and
also abroad on short waves. In addition, the iso-frequency station Isoradio,
covering a large portion of the Italian highway system, provides music and
continuously updated reports on weather and traffic conditions.
Radio programming (% breakdown)
85.14
100
65.13
80
46.68
60
Information Culture and society Entertainment Public service
4.86
4.13
0.59
1.6
0
11.78
4.5
1.05
24.08
13.6
14.46
20
11.78
11.62
40
Other
As shown in the table above, Radiouno focuses on information and service,
though maintaining a good percentage in the other programming genres, while
RadioDue is largely dedicated to entertainment and RadioTre to social and
cultural programs.
Radio air-time
2001
Total hours
National broadcasting
RadioUno
RadioDue
RadioTre
Regional broadcasting
in Italian
in German
in Ladino
in Slovene
in French
GR Parlamento
Isoradio
International broadcasting
Total
%
2002
Total hours
%
8,603
8,760
8,760
26,123
12.9
13.2
13.2
39.3
8,603
8,760
8,760
26,123
12.8
13.1
13.1
39.0
5,075
4,801
365
4,523
102
14,866
5,110
8,760
11,576
66,435
7.6
7.2
0.5
6.8
0.2
22.4
7.7
13.2
14.1
100.0
5,502
4,785
367
4,491
123
15,268
5,110
8,760
11,680
66,941
8.2
7.2
0.5
6.7
0.2
22.8
7.6
13.1
17.5
100.0
Radio programming is further enriched by the cable radio station Rai Auditorium,
providing light and classical music.
20
Television
Television Channels 1 and 2 Division
Mission: to produce and develop the offer of television programs and news and
to provide a highly innovative public broadcasting service.
Objectives: to maximize viewers and advertising revenues, and to provide
top-quality programming.
Outlets: RAIUNO, RAIDUE, TG1, TG2, RAI Notte, RAI Fiction.
Rai’s first channel aims to serve and reflect Italian society as a whole, offering
mainstream contents in the form of entertainment and segment programs,
coverage of special national events and important sporting events, popular
feature films and Rai-produced TV drama.
In 2002 great effort was devoted to the production of new general interest
programs along with continuing long-time favorites.
RAIUNO’s offer included:
Segments
Focus
Entertainment
Uno Mattina
Prova del Cuoco
Casa Rai Uno
La vita in diretta
Porta a porta
Rubriche del TG1
Carramba che sorpresa
La bella e la bestia
Novecento
L’ultimo del Paradiso
Lunedì film
Per tutta la vita
Stasera pago io
TV Drama
Special events
Sports
Maria Josè
Resurrezione
Perlasca
Commesse 2nd series
La guerra è finita
Un difetto di famiglia
Papa Giovanni
Lo zio d’America
Storia di guerra e d’amicizia
Il maresciallo Rocca
Don Matteo
Il commissario Montalbano
Festival di Sanremo
Pavarotti&Friends
La partita del cuore
Miss Italia
Formula One GPS
Uno mattina sabato & domenica
Uno di noi
Soccer World Cup:
Coverage of the matches
and commentary
90° minuto
The information offered by TG1, the leading public service news provider,
included 12 daily newscasts from 6:30 a.m. to midnight along with magazines,
press overviews, live coverage and specials for a total of 1,535 hours of airtime.
Audience shares in 2002 saw TG1 reducing the gap with respect to its
competitors recorded in the first 4 months of the year, and recovering its
leadership for 7 of the remaining 8 months.
The second channel’s main objective is to bring on the screen innovative
contents targeted to specific audiences, mostly through original programs and
slots dedicated to music, culture and entertainment, disengaged from large
segment programs and pre-packaged formats.
The channel’s schedule is also characterized by programs targeted to children
and young viewers.
In addition, Palcoscenico is the only program on Italian television dedicated to theater.
21
RAIDUE’s offer included:
Music
Children
Entertainment
Destinazione Sanremo
My compilation
Top of the pops
Disney Club
Domenica Disney
Art attack
Chiambretti show
La grande notte del lunedì
Cartoons
(7-10 a.m., 5 and 8 p.m.)
TV series
Focus
Sports
E.R.
Felicity
Friends
Streghe
Excalibur
Italia sul 2
I nostri soldi
America’s Cup
Quelli che il calcio
La Domenica sportiva
Providing much more than simply news, TG2 offers 5 daily newscasts (9 on
Saturday and Sunday) enriched with magazines (Costume e società, Medicina
33, Salute, Nonsolosoldi, Eat Parade, Tg2 Net, Tg2 Motori, Neon Cinema e
Libri, Sì Viaggiare and Dossier), for a total of 1,049 hours of airtime in 2002.
Notte
22
In 2002 Rai Notte’s offer was again shared between “memory”, with the night
schedule of national and international films and documentaries from Rai’s
libraries accounting for 1,400 hours of air-time, and other programs focusing
on social, environmental, current affairs themes, as well as on music and the
performing arts. Rai Notte programmed a total of 2,400 hours for the night
schedules of RAIUNO and RAIDUE.
Television Channel 3 and Related Offers Division
Mission: to produce and develop public utility television programs and
information, with strong social and cultural contents and with particular
attention to regional programming.
Objectives: to maximize program quality and audience ratings in accordance
to specific targets.
Outlets: RAITRE, TG3, TGR, regional programming for the Aosta, Bolzano and
Trento stations, as well as RAI News 24, Televideo, RAI International, Tribune e
Servizi Parlamentari and RAI Educational.
In 2002 the third channel further developed its distinctive public service trait,
providing programs centered on cultural, environmental, social and historical
themes, as well as high-quality feature films and entertainment, ranging from
original TV series (Un posto al sole and La squadra), to satirical shows (Il caso
Scafroglia), to current affairs programs (Ballarò).
RAITRE’s offer included:
Day-time
Prime-time
Nighttime
Alle falde del Kilimangiaro
Cominciamo bene
Geo&Geo
La Melevisione (bambini)
La musica di Raitre
Per un pugno di libri
Screen Saver
Chi l’ha visto?
Elisir
La Grande Storia
Mi manda Raitre
Report
Ulisse: il piacere della
scoperta
C’era una volta
L’elmo di Scipio
Racconti di vita
Storie maledette
Sfide
Un giorno in pretura
After the attempted unification with the regional newsdesks, the third channel’s
national news is once again separate, providing in 2002 over 735 hours of airtime, including 5 daily newscasts, the press overview Prima Pagina, specials
Primo Piano and Gt Ragazzi and magazines (Articolo, Punto Donna, Shukran,
Cifre in Chiaro, Sabato notte and Agenda dal mondo).
Since last May, TGR operated once again independently. Its news offer
included:
O 3 daily television newscasts and 2 radio newscasts broadcast regionally,
O 50 radio programs and 32 television programs in Italian, French, German,
Ladin and Slovene broadcast from the newsdesks of regions with special
statutory regimes,
O 2 daily news magazines respectively on science (Leonardo) and technology
(Neapolis),
O 6 weekly magazines on issues concerning the environment, culture, art,
economics and international affairs (Ambiente Italia, Mediterraneo, Bell’Italia,
Italia Agricoltura, Europa and Economia and Mercati),
O regional political debates, local community announcements,
O numerous specials broadcast nationally and regionally.
Thanks to its personnel of 906, in 2002 TGR produced 5,500 hours of television
news and 6,000 hours of radio news with an overall increase of television and
radio audience ratings.
23
Related offers: year 2002 highlights
Educational
100 hours of programming for
RAIUNO, 50 for RAIDUE and
323 for RAITRE
Production of programs for the
three TV channels (Vieni avanti
cretino, Off Hollywood, Parola
Mia)
La televisione da ricordare: rerun
of RAI programs from the past
scheduled on RAITRE’s late-night
band
Distance education and training
courses in agreement with
Ministries and Foundations
RaiEdu Lab1: 500 hours of
cultural programs (history,
philosophy, literature, arts and
science)
RaiEdu Lab 2: 1,470 hours on
professional training and
updating, employment, services
for the handicapped and
computer education
Mosaico: a “mediateque” for
schools
A project by Rai Educational to
deliver audiovisual material in
support of education through a
video-on-demand service
Newsgathering:
multimedia desk gathering
sources (foreign
broadcasters and press
and video agencies, RAI
channels, regional
newsdesks,
correspondent’s offices
etc.) with round-the-clock
updates, available through
TV, internet and new
media platforms
Live events in multimedia
transmission also on GPRS
and UMTS platforms
Stream programming
providing news, weather
and traffic reports, current
affairs, in-depth
magazines
Free digital satellite channel
transmitting in Europe and North
Africa bilingual programs in
Italian and Arabic
Spreading Italian language and
culture among the over
60 million Italian-speaking
viewers in the world
Produced by the joint effort of
Rai News 24, TG3, Palermo’s Rai
desk and Rai Sat
TV and radio programming
providing news, sports and
service programs, bringing Italy
abroad
A Mediterranean network:
exchange of news and program
formats among
Euro-Mediterranean public
service broadcasters. The weekly
program Scirocco was born from
this collaboration
24
4 distribution networks (South
America and Oceania, North
America, Africa and Asia).
Coverage of Africa and
separation of Asia were
completed. A further subdivision
of continental macro-regions is
in progress
Tribune Accesso – Servizi
Parlamentari (Candidates’
Debates and
Parliamentary Services):
217 hours aired on
television and 8 aired
on radio
Daily news on the
activities of Italian
Parliament and more
broadly on institutions
and politics
Rai’s tele-text service Televideo is one of Italy’s favorite information providers:
85% of Italians are familiar with it and 80% of the country’s television sets can
receive it. Ultim’ora (the page offering the latest news item) has approximately
9 million readers daily.
The national format, with an average of 2,000 pages daily, is shown on
RAIUNO and RAIDUE, while the regional format, with an average of 800
pages daily per region, is shown on RAITRE.
In accordance with the public service contract, Televideo offers a subtitling
service for persons with aural impairments and an audio description service for
the visually impaired.
The novelties of 2002:
a preliminary project for the real-time reporting of stock exchange results and
for their provision to mobile phone companies
O new page layout
O 4 new sections: Cittadini, Atlante della crisi, Punto Verde and the daily press
overview and upcoming events magazine Oggi.
O
Radio
Radio Division
Mission: to produce and develop the offer of radio news and entertainment
programs and to provide the most comprehensive public service.
Objectives: to increase the number of listeners and improve program quality,
favoring advertising revenues.
Outputs: RadioUno, RadioDue, RadioTre, Isoradio, Gr Parlamento, Cable radio.
First radio station, with largest
audience
Focuses on entertainment and
pop music
The quality station
focusing on public service
Focuses on current affairs
(national and international
politics, economics, society,
science and technology)
Targeted to a young audience
Slant on culture (music,
arts, entertainment),
science and technology
Classical music and
theater
Running commentaries of
major sporting events
Areas of regional news
Leader in radio information,
with 47 daily newscasts, also
on the internet
General interest news on GR1,
social and youth oriented on
GR2, international and critical
on GR3
Station dedicated to
parliamentary activities:
broadcasts works of the
House and Senate and their
Commissions, providing
citizens with a window onto
parliamentary life
Service station for all
listeners traveling by car:
regularly updated reports
on weather, road and
traffic conditions
Also provides music and
short magazines
Also provides analyses,
debates and press overviews
25
Teche
Progetto Teche
The great investment in the Rai Teche (archives) project is aimed at gathering,
cataloguing and enhancing Rai’s enormous historical and documentary heritage.
In the year 2002 the department was strengthened, with the improvement of
various aspects of management, contracts and acquisitions and of the technological
support required for the development of MultiMedia Catalogue (CMM).
Rai Teche in numbers:
31,000 hours of digitized historical television material e 14,000 hours of
daily television material
O 30,000 hours of television material documented (16.000 hours historical and
14,000 hours daily)
O 151,000 hours of accessible television material
O 14,650 hours of television material from regional stations
O 22,000 hours of digitized historical radio material and 35,000 hours of daily
radio material
O 45,000 hours of radio material documented (22,000 hours historical and
23,000 hours daily)
O a total of 348,000 hours of radio material accessible
O 6,830 in-company Octopus system/CMM users
O 970 hours or archival material contributed to programs aired on the three
television channels.
O
Industrial activity
Rai’s industrial activity is carried out by the TV Production Division, for all that
concerns production, and by RaiWay, for all that concerns distribution.
TV Production Division
Divisione Produzione TV
In 2002 the Division supported all the channels and newsdesks and helped
maintaining their high-quality standards, despite a rigorous policy of external
cost reduction, thanks to its professional and technological resources in all
sectors (studios, graphics and post-production sectors, mobile links, shipping
and logistics).
26
News
Long-running productions
Special events
30 Rai newscasts daily
management of 19,000 links
and transfers
Festival di San Remo
Telethon
Giro d’Italia
Uno di Noi (Lotteria Italia)
Soccer World Cup
- Live coverage of matches
- Additional cameras during
the Italian national team’s
matches
- Services and commentaries
Coverage of Champions
League’s games for other
broadcasters
Berlin’s European Swimming
Championships
Munich’s European Athletic
Championships
Rai Way
Rai Way’s primary mission is to carry out the distribution of Rai’s radio-television
signals in Italy through more than 2,300 repeaters located over the entire
national territory.
Rai Way contributes to the realization of programs (in particular through the
Way Net fiber-optic network, which is being completed), making transfers from
shooting locations to Rai production centers. The company also manages the
design and production of equipment and measures its environmental impact.
Rai Way also carries out similar activities for other broadcasters.
Television
Audiences
As discussed above, television audiences registered in 2002 a steady increase,
reaching over 9 million viewers for the average day (up 2.1% on 2001).
Prime time audiences, a very important segment, grew by 0.6% on the previous
year.
Rai’s gap with its competitor Mediaset in terms of the average share for the year,
including both the whole day and prime time segments, was reduced in 2002,
while other broadcasters’ (e.g. satellite channels) shares continue to grow.
The breakdown of share by time band is unchanged from the previous year. Rai
holds a leadership in share for the whole day, with the exclusion of nighttime
audiences. The monthly share sees Rai slightly ahead of Mediaset for the full
period, with the exception of June and July in which the Soccer World Cup
generated a considerable advantage for Rai.
The breakdown of audiences by network confirms the leadership of RAIUNO,
followed by Canale5, RAIDUE, Italia1, RAITRE and, finally, Rete4.
20
10
10
0
23.53
22.59
9.61
10.42
15
9.31
8.99
30
10.3
11.35
20
9.6
10.41
40
9.65
9.71
25
13.67
13.13
43.15
42.94
47.25
46.65
50
23.93
23.81
Whole day share by network
Average daily share
5
Rai
source: Auditel
Mediaset
Others
0
Rai Uno
Rai Due
Rai Tre
Canale 5
Italia 1
Rete 4
Others
source: Auditel
27
Restricting the analysis to prime time audiences, RAIUNO yields for the second
consecutive year its leadership to Canale5, in the same way as Italia1 performs
better than RAIDUE, while RAITRE ranks above Rete4.
0
Rai
source: Auditel
Mediaset
Others
9.37
10.35
8.08
8.07
10
10.88
12.17
20
10.43
10.43
15
13.49
12.12
30
9.37
10.35
20
10
23.66
23.04
25
40
24.09
23.82
Average prime time share by network
43.05
44.06
50
47.58
45.59
Average prime time share
5
0
Rai Uno
Rai Due
Rai Tre
Canale 5
Italia 1
Rete 4
Others
source: Auditel
Radio
RadioRai maintained for the whole of 2002 its leadership in a market
characterized by strong competition and a wide and varied offering. Rai’s
total audience, amounting to 12,687,000 listeners, has grown by 1.5% on
the previous year.
RadioUno confirms its leadership in terms of listeners, though registering a 1.4%
decline in audience on 2001, when demand for news services prevailed
following the 9/11 terrorist attacks.
8,000
7,860
Radio audiences in 2002 (in thousands)
2,000
3,168
4,092
2,176
3,000
1,567
2,096
4,000
3,872
5,000
4,267
6,000
5,209
5,203
7,000
199
1,000
28
RMC
Radio 105
RDS
Radio Italia
RTL 102,5
Deejay
Notturno
IsoRadio
RadioTre
RadioDue
RadioUno
0
Radio Due, though losing slightly on the previous year – registering a 1.4%
decline in audience – has gained in terms of young audiences, reaching its
competitor Radio Deejay that registered a strong decline in 2002.
Due to the growing favor with audiences for cultured and modern programs,
Radio Tre and Isoradio, the latter due to the increase in the number of travelers,
registered in the year a strong growth in audience (up respectively by 4.2% and
8.7% on 2001).
8,000
7,969
7,860
Radio audiences (in thousands)
5,276
5,203
7,000
6,000
5,000
3,000
1,411
1,567
2,011
2,096
4,000
2,000
1,000
0
Human resources
RadioUno
RadioDue
RadioTre
IsoRadio
In 2002, Rai’s human resource’s policy focused primarily on the professional
development and the training of personnel, while achieving higher productivity,
maintaining personnel costs under control through the management of turnover
and a selective hiring policy.
In pursuing a careful planning of investments in human resources, and in a
sector that requires a high degree of professional flexibility for many positions,
Rai decided to enhance the role of internal mobility.
Training and internal communications
The training of Rai personnel involved the following areas:
O management training for newly hired personnel and individual training on
performance and results assessment;
O journalism;
O foreign languages (special courses for journalists and managers, multimedia
courses available on 950 computer terminals);
O safety (training courses for Heads of Internal Safety Departments, certification
of personnel of emergency teams, courses for personnel working in unstable
and crisis areas);
O training in the programs area: Masters Degree for TV authors and courses on
radio and television production.
29
9,901
1,000
9,970
10.500
10,118
Personnel
9,500
Industrial relations
9,000
8,500
Internal communications are managed through the www.comunicazione.rai.it
site on which all information relating to the Group and its activity is available.
A project named RaiPlace for the management of internal communications, both
institutional and personal, was launched.
To promote the role of Rai in the national training system, about 300 partecipants
were admitted to its training activity, involving more than 13,000 days of
training.
2000
2001
2002
Main events occurred in 2002 include:
O July 16: conclusion of negotiations with the USIGRAI journalists trade union for
the renewal of the labor contract for Rai employees;
O July 18: conclusion of negotiations for the application and interpretation of the
Labor Contract for middle management, employees and workers;
O October 31: renewal of the Labor Contract for Rai’s Symphony Orchestra
professors;
O November 27: underwriting with management association ADRAI of the Rai
Management Contract.
At December 31, 2002, the company employed (including long-term personnel
and trainees) 9,901 persons (69 less than at the end of the previous year).
A total of 234 terminations (of which 151 as a result of early retirement
incentives) and 165 hirings, including new trainees, were recorded in the year.
Of the hirings, 57 relate to persons reinstated into their position following
litigation, 59 following labor agreements, 27 transferred from other Group
companies and 22 new hirings.
The trend recorded in past years towards a reduction in personnel continues,
aided by early retirement incentives offered in 2002.
30
Rai’s personnel by category
2002
2001
Managers and equivalent
Managers
Journalists
Journalists
Middle executives
Employees (including medical staff)
Production staff
Cameramen
Program executives
Technicians
Workers
Orchestra choir and conductors
Long-term staff
Trainees
291
315
1,343
1,038
2,725
1,563
532
643
160
1,052
132
9,793
108
299
300
1,365
1,023
2,729
1,507
527
598
230
1,080
132
9,790
180
Total at December 31, 2002
9,901
9,970
Research and Development
Research and Development activities are carried out prevalently by the Center
for Research and Technological Innovation based in Turin, in cooperation with
the Strategic Technologies Division and major Italian and international research
centers and universities.
Main events in 2002 are described below:
O computerized and local network television production testing; feasibility study
for the development of a digital radiocamera;
O studies in cooperation with industrial partners for the invention, testing and
display of audiovisual services on UMTS terminals;
O Digital Terrestrial Television (DTT): completion of the Operating Plan for
testing in years 2002-2003, involving the setting of objectives, the offer of
television and interactive services, pilot areas, required infrastructure and
investment;
O holding of a UER (Union Europeénne de Radio-Television) work group for the
evaluation of new compression and decoding systems in the Web and
broadcasting areas; presided over the work group for the update of satellite
broadcasting standard;
O definition of services offered through Interactive TV on the DVB-MHP
(Multimedia Home Platform) standard and development, coordinated by the
Innocenzi Commission of the Ministry of Communications, of e-government
applications offering interactive services to citizens;
O analysis of the WayNet radio bridge SDH network for the distribution of
radio and television signals, proposing innovative solutions for the optimization
of connection time, flexibility and capacity of the network;
O 6 new patents and a number of extensions for Europe of existing patents.
The center, moreover, participated in training and information activities
regarding new technologies and services, collaborating in the creation of Web
sites associated to television programs, within the Rai portal.
31
Financial Review
A Summary Income Statement and Balance Sheet are included on page 8.
Main items are analyzed in the section that follows.
Income Statement
Revenues
Revenues from sales and the provision of services amount in 2002 to euro
2,565.9 million, up 0.8% on 2001.
Revenues from sales and services (in millions of euro)
2002
%
2001
%
License fees
Advertising
Other revenues
1,382.5
1,038.5
144.9
53.9
40.5
5.7
1,350.1
1,028.1
168.1
Total
2,565.9
100.0
change
53.0
40.4
6.6
32.4
10.4
- 23.2
2,546.3 100.0
19.6
License fees
Revenues from license fees amount to euro 1,382.5 million, up 2.4% on the
previous year due to a euro1.35 increase in the annual license fee that, as
mentioned, remains the lowest in Europe, in addition to the growth in the
number of paying subscribers.
Thanks to a campaign aimed at reducing evasion featuring a strong advertising
campaign, new subscriptions amount to 416,979 (up 0.8%), while the number
of morose subscribers remains stable (slightly over 4%).
Subscriptions
2002
2001
% change
Renewals
New subscriptions
Paying subscribers
Morose subscribers
Total subscribers
Morose subscriber rate
Cancellations
15,114,348
416,979
15,531,327
684,679
16,216,006
4.33 %
354,776
15,055,319
413,805
15,469,124
662,178
16,131,302
4.21%
299,465
0.4
0.8
0.4
3.4
0.5
Advertising revenues
Advertising revenues amount to euro 1,138.5 million, up 1% on the previous
year, slightly more than the growth registered by the advertising market as a
whole.
Television advertising registered a moderately good performance (with revenues
growing by euro 19.1 million, up 2.1% on the previous year), in line with
revenues from promotions and sponsoring (up euro 0.9 million, a 1.2% increase
on 2001).
Radio advertising revenues decline instead by 14.2% (down euro 9.9 million)
due in part to the negative performance of the advertising market as a whole
and the low appeal represented by Rai’s radio audiences, that continue to be of
moderate interest for advertisers, despite efforts to redirect RadioDue programming
towards a younger public.
32
Other revenues
Other revenues amount in 2002 to euro 144.9 million, declining by euro 23.3
million due primarily to lower productions carried out for third parties (down
euro 5.7 million) and rights sold (down euro 14.2 million), particularly in the
sports segment.
Operating costs
Operating costs are made up by the cost of materials, services received and
personnel costs. They are in line with the previous year (euro 2,278.8 million,
against euro 2,242.6 million in 2001).
Materials and services received
The item includes the following costs: purchase of materials and services
received, leases and rentals (filming rights, primarily of sporting events,
copyrights, services received from subsidiaries, operating costs, freelance
work and consulting, rental of studios, telephone, postage, etc.) and, finally,
public broadcasting license fee.
Goods and services (in millions of euro)
2002
Purchase of materials
Services received
Leases and rentals
Public broadcasting
license fee
Other
Total
25.8
681.8
765.9
26.0
2001
change
27.8
715.4
724.6
27.1
%change
- 2.0
- 33.6
41.3
- 1.1
- 7.2
- 4.7
5.7
- 4.0
5.1
1.0
4.1
510.0
1,504.6
1,495.9
8.7
0.6
The increase in costs from the previous year is equal to 0.6%, below the rate of
inflation for 2002 (equal to 2.5%, as calculated by ISTAT for 2002).
Among changes in main expense items is a considerable increase in the cost of
leases and rentals due to extraordinary charges for the acquisition of rights for
sporting events (primarily for the Soccer World Cup, accounting for euro 62
million, and the Winter Olympics, euro 19.6 million).
Personnel costs
Personnel costs amount in 2002 to euro 774.2 million, as compared with euro
746.8 million in the previous year, up 3.7%. The increase is due primarily to the
adjustment of compensation and social security charges as a result of the
application for the whole of 2002 of the labor contract for the category, signed
in 2001 and applicable from July 1 of the same year, in addition to the
provision accrued against the commitment to pay, pursuant to current
agreements, additional pension benefits to some employees. The increase in
the provision due to the update of some parameters used in the calculation of
the same, amounts in 2002 to euro 20.9 million.
The average number of employees, including long-term staff, trainees and term
employees amounts to 11,489, declining by 45 on the previous year.
33
Gross operating margin
As a result of the above mentioned changes, Gross Operating Margin declines
by euro 20.4 million, down from euro 320.5 million in 2001, to euro 300.1
million in 2002.
Expenditure on programs and amortization
Expenditure on programs in 2002 declines on the previous year, as shown in
the table below.
Expenditure on programs (in millions of euro)
2002
2001
change
% change
Programs and Fiction
Programs with readily
usable rights
Other programs
170.3
38.7
194.4
69.2
- 24.1
- 30.5
- 12.4
- 44.1
6.9
7.4
- 0.5
- 6.8
Total expenditure
on programs
215.9
271.0
- 55.1
- 20.3
The decline of expenditure on programs was determined by a more selective
choice of programs, resulting in savings.
As a result of lower expenditure on programs, in 2002 the related amortization
expense declines from euro 261.4 million in 2001, to euro 226.2 million in the
current year. The amortization expense relating to fiction programs increases
instead due to amortization charges carrying over from previous years, in which
expenditure on such programs was higher.
Amortization of programs (in millions of euro)
Programs and Fiction
Programs with readily
usable rights
Other programs
Total amortization
of programs
2002
2001
change
% change
174.1
38.4
161.3
76.7
12.8
- 38.3
7.9
- 54.8
13.7
23.4
- 9.7
- 42.4
226.2
261.4
- 35.2
- 13.5
Depreciation
The depreciation expense is unchanged at euro 100 million. Capital expenditure
declines from euro 72.2 million in 2001, to euro 53.8 million in 2002 thanks to
a more selective evaluation of investments, technological development and
qualitative improvements in plant and equipment.
Other revenues and charges amount in 2002 to euro 35 million and consist
of the balance of accruals against write-downs and risks, and other operating
income and charges, declining by euro 10.8 million.
34
Operating income
Operating income amounts to euro 8.4 million, up euro 4.5 million on the
previous year.
Net financial income amounts to euro 33.4 million (as compared with euro
60.1 million in 2001) and includes income from investments amounting to euro
46 million and net financial charges (euro 12.6 million).
Income from investments includes dividends received in the year from
invested companies, the related tax credit and capital gains realized on
the disposal of investments.
Net financial charges include net interest charges payable to banks and
Group companies, in addition to net foreign-exchange losses. The latter are due
to the rapid and strong devaluation of the dollar in the first part of 2002 and the
resulting negative spreads of currency hedging contracts concluded in the past
to hedge the risk of fluctuations in the e/$ exchange rate.
(in millions of euro)
2002
2001
Dividends from:
Sipra
Rai Trade
Rai Sat
Rai Way
Others
Total dividends
Tax credit on dividends
Capital gain on disposal of investments
Total income from investments
18.0
0.2
2.1
8.8
0.3
29.4
16.6
0.0
46.0
25.8
8.8
1.2
1.6
0.4
37.8
15.8
4.0
57.6
- 7.8
- 8.6
0.9
7.2
- 0.1
- 8.4
0.8
- 4.0
- 11.6
- 12.6
2.5
- 15.1
33.4
60.1
- 26.7
from investing activities
change
The average cost of bank debt declines to 4% (from 5% in 2001), accompanied
by a decline in interest accrued on deposits from 3.3% in 2001, to 2.9%, in line
with average bank rates (3.3% corresponds to the 3-month Euribor rate in
2002).
Net income
In 2002 the company reported a net income equal to euro 5 million.
35
Balance Sheet
A Summary Balance Sheet is included on page 8. Main items are analyzed in
the section that follows.
Current assets
Current assets increase by euro 114.9 million due to ordinary management
operations.
Provisions for risks and charges decline by euro 20.9 million due to the payment
of the variable portion of production prizes and the payment of early retirement
incentives. As no particular change occurred in the company’s assessed risk
position, the coverage provided by accruals made is deemed appropriate to face
future risks and charges.
Current assets (in millions of euro)
2002
2001
change
Inventories
Trade receivables
Other current assets
Trade payables
Provisions for risks and charges
Other current liabilities
3.6
690.6
181.2
- 533.8
- 497.2
- 169.1
8.7
672.4
166.8
- 597.8
- 518.1
- 171.6
- 5.1
18.2
14.4
64
20.9
2.5
Net current assets
- 324.7
- 439.6
114.9
Trade receivables include amounts receivable from subsidiaries, mainly from
Sipra for which they amount to euro 317.4 million (as compared with euro
299.2 million in 2001), receivables from Italian ministries amounting to euro
139.7 million (against euro140.1 million in 2001), and receivables from the
Ministry of the Economy and Finance relating to license fees collected payable
to Rai, amounting to euro 119.2 million (as compared with over euro 94.3
million in 2001).
36
Shareholders’ Equity amounts at the end of 2002 to euro 607.1 million and
increases by euro 5 million on the previous year due to net income reported
for the period.
The net financial position at the end of the year is shown in the table below:
2002
2001
change
- 127.0
- 6.4
22.2
- 111.2
- 129.6
-1.3
116.4
- 14.5
2.6
- 5.1
- 94.2
- 96.7
Short-term investments
- 60.2
205.0
144.8
2.6
- 120.2
143.8
23.6
3.5
60.0
61.2
121.2
- 0.9
Average indebtedness
36.2
17.3
12.6
21.7
23.6
- 4.4
Net bank and other debt:
medium- and long-term
short-term
cash
Net financial position with Group companies
payables
receivables
The cash flow for the year includes all financial transactions with subsidiaries
and is negative by euro 23.6 million. The negative flow must be evaluated in
view of the strong outlays for the acquisition of sporting event rights, as the
2002 World Soccer Championship and the advances paid for the 2004
Olympics and the 2006 World Soccer Championship, in addition to the growth
in receivables from the Ministry of Economy and Finance. The sale of the equity
investment in Tele+ generated instead a positive flow of euro 46.5 million.
37
Relationships with Group companies
Subsidiaries
In 2002, the Rai Group continued to operate according to an organizational
model based on decentralized activities managed by subsidiaries created for
the purpose.
Transactions with subsidiaries and affiliated companies were concluded at
market conditions.
A number of services as accounting and administration management, personnel
management, real estate, legal counseling and research, inventory management
and information technology have been centralized for a number of subsidiaries.
Parent company Rai carries out on behalf of Group companies treasury
management, ensuring the coverage of financial needs and efficient cash
management.
In the section that follows we provide financial and operating information on the
activities carried out by subsidiaries controlled by Rai SpA.
in millions of euro
2002
2001
%
Revenues
Operating costs
Operating income
Financial income (expense)
200.8
145.0
17.2
- 3.0
203.8
146.6
20.1
- 2.4
- 1.5
- 1.1
- 14.4
25.0
Net income
Capital expenditure
5.5
78.3
- 34.2
34.2
9.3
81.7
- 23.6
57.5
- 40.9
- 4.2
44.9
- 40.5
Employees (no.)
727
733
-6
Rai Way manages the transmission and distribution of the radio and television signal, devoting particular
attention to environmental impact.
Rai Way closes its third financial year reporting positive results, despite a decline in revenues from the parent
company and difficulties encountered in acquiring new customers outside the Group.
In the 2002 financial year the fiber optic network made strong progress, while the company retained its
market share in the Broadcast and Transmission segment, despite strong competition.
The Company reacted to the decline in revenues by rapidly improving efficiency, thanks to a careful selection
of investments and a reduction in operating costs.
38
in millions of euro
Revenues
Operating costs
Operating income
Net income
Capital expenditure
Employees (no.)
2002
2001
%
1,130.7
1,114.5
14.9
2.6
1,127.6
1,095.6
28.2
3.3
0.3
1.7
- 47.2
- 21.2
10.1
33.9
39.5
2.3
18.0
41.7
40.1
12.3
- 43.9
- 18.7
- 1.5
- 81.3
431
421
10
Sipra sells advertising on television, radio and other media on behalf of Rai.
The performance recorded in 2002 reflects the stagnation of the advertising market that registered in the year
only a moderate increase, against a significant contraction in the previous year. Efforts devoted to
maintaining a steady level of revenues, increasing slightly on 2001, resulted in a higher use of resources
and a consequent rise in costs.
Sipra managed however to provide the parent company with a steady level of revenues.
in millions of euro
2002
2001
%
Revenues
Operating costs
Operating income
47.6
32.4
2.1
- 0.2
46.5
30.7
5.8
- 0.7
2.4
5.5
- 63.8
- 71.4
Net income
Capital expenditure
1.9
5.4
- 2.2
11.0
2.5
5.6
4.6
11.0
- 24.0
- 3.6
- 147.8
- 0.0
Employees (no.)
59
53
6
Rai Sat produces the editorial content of theme channels distributed through Tele+.
In 2002 the company continued to enhance the editorial content and distribution of its production with strong
results, considering the advertising sales of the Ragazzi and Cinema channels, despite the modest growth in
subscriptions (due to piracy and the fact that the promotion made by Tele+ to regain customers from illegal
viewers does not include Rai Sat’s channels among those offered under subscription).
At the end of the year a number of acquisitions were announced in the pay-TV sector. The effect of these will
strongly affect the business, concentrating the offer of satellite theme channels into the hands of a single
operator.
39
in millions of euro
2002
2001
%
Revenues
Operating costs
Operating income
77.1
56.4
9.0
- 0.3
102.7
69.4
9.2
0.7
- 24.9
- 18.7
- 2.2
- 142.9
Net income
Capital expenditure
2.4
17.1
- 0.3
14.5
2.6
15.0
31.7
19.1
- 7.7
14.0
- 100.9
- 24.1
Employees (no.)
83
89
-6
Rai Trade is the licensee for the marketing of Rai products.
The Company managed the introduction of the brand on foreign markets, renewing alliances with foreign
partners for the exploitation of second rights, particularly those for the broadcasting of sporting events (e. g.
the Italian Soccer Championship), managing also the “Great musical and theatrical events” area.
In 2002, Rai Trade continued to streamline product and process costs, while the acquisition of rights relating
to sporting events was transferred back to the parent company.
in millions of euro
2002
Revenues
Operating costs
Operating income
Net income
Capital expenditure
Employees (no.)
2001
%
315.2
30.1
14.0
- 8.4
286.5
19.7
12.5
- 5.8
10.0
52.8
12.0
44.8
4.4
123.2
- 168.5
285.1
11.9
118.8
- 120.2
286.3
- 63.0
3.7
40.2
- 0.4
66
67
-1
The company continued to be active in the acquisition and marketing of rights on audiovisual and
multimedia products, particularly for the production and editorial requirements of Rai. It has also
developed the production of high-quality feature films and TV drama with good commercial appeal.
In 2002 the Company started the distribution of films, incorporating for the purpose in the first half of 2001
company 01 Rai Cinema & Studiocanal distribution Srl.
Rai Cinema, finally, started marketing Home Video products, a sector that has been revitalized by the
growing success of DVDs.
40
in millions of dollars
2002
2001
%
Revenues
Operating costs
Operating income
18.4
18.3
- 0.2
0.1
20.1
19.5
0.4
0.1
- 8.5
- 6.2
- 150.0
0.0
Net income
Capital expenditure
- 0.4
1.1
0.8
0.1
0.1
1.4
1.8
0.3
- 500.0
- 21.4
- 55.6
- 66.7
Employees (no.)
44
43
-1
Rai Corporation provides technical and production assistance to Rai’s news production, monitoring the
American media and television product market, in addition to representing and managing external relations
with Italian communities and institutions in the American continent.
Financial year 2002 was dedicated prevalently to a streamlining of the structure in view also of the stronger
requirements resulting since the tragic events occurred in September 2001.
Click
in millions of euro
2002
2001
%
Revenues
Operating costs
Operating income
0.1
2.6
- 2.9
0.4
0.1
2.3
- 2.6
0.6
0.0
13.0
11.5
- 33.3
Net income
Capital expenditure
- 2.5
9.9
10.0
0.3
- 2.0
12.4
12.2
1.1
25.0
- 20.2
- 18.0
- 72.7
2
2
Employees (no.)
Rai Click, a joint venture between Rai and e.Biscom, is active in the distribution of audiovisual and
multimedia products through broadband Internet networks.
Financial year 2002 was characterized by the slow progress of the cable laying process and the continuing
negative market situation. The Company concentrated on cost reduction and the selection and evaluation of
investments with the aim of preserving the Company’s potential for development, focusing on the
enhancement of the editorial project.
In the last quarter, Rai Click marketed the first pay-TV packages on the Fastweb circuit.
41
Net
in millions of euro
2002
2001
%
Revenues
Operating costs
Operating income
4.4
10.9
- 7.8
0.3
2.4
17.0
- 17.0
0.6
83.3
- 35.9
- 54.3
- 50.0
Net income
Capital expenditure
- 7.5
6.2
6.3
0.0
- 16.4
10.7
13.8
3.0
- 54.1
- 42.1
- 54.3
- 100.0
Employees (no.)
63
56
7
Rai Net develops the offer of Rai programs and services on the Internet, focusing on production synergies with
the parent company and production efficiency.
Despite the fact that the Internet sector is undergoing a period of stagnation and there are no signs of a
recovery in the short term, Rai Net recorded very good results in the adaptation of Rai’s radio and television
production on the Internet.
The Rai.it portal, in its first year of activity, performed well, conquering the leadership in the news and
information sector.
in millions of euro
2002
2001
Revenues
Operating costs
Operating income
4.8
3.8
0.5
0.0
5.0
3.7
1.0
0.0
- 4.0
2.7
- 50.0
-
Net income
Capital expenditure
0.5
4.7
2.4
0.3
1.0
4.2
2.3
0.3
- 50.0
11.9
4.3
0.0
Employees (no.)
49
50
%
-1
Despite the overall negative market situation and the decline in advertising revenues, a reduction in operating
costs allowed the company to keep its operating and financial performance in balance.
In 2002 the Company continued to focus on the provision of information and cultural programs to the San
Marino community.
In the year, the Company started a project for the testing of digital broadcasting technologies.
42
Other information, main
events and outlook
Information required by article 2428 of the Italian Civil Code is included below.
Main events subsequent to the date of the financial statements are:
O the increase in the license fee for 2003, set at euro 97.10 by Ministerial
Decree dated December 20, 2002;
O the incorporation, pursuant to a resolution dated February 19-20, 2003, of a
joint-stock company denominated provisionally NewCo Rai International,
with capital stock equal to euro 1 million, of which 99.9% underwritten by
Rai, and 0.1% by subsidiary Rai Trade. The company was created to face the
rapid evolution of the media sector at the international level, requiring a
structure able to respond to the requirements of a public service and the need
to distribute commercially programs aimed at Italians residing abroad;
O the transfer, resolved on February 20, 2003, of Raidue’s Director and the
related office to Milan. New editorial initiatives were devised in the context of
Raidue’s programming, while the Milan and Turin Production Centers were
streamlined and upgraded.
It is finally noted that neither the Company nor any of its subsidiaries own any
Rai shares, either directly or through trust companies or person, and that in the
year the company has not acquired or sold any of its own shares.
With regards to the outlook for the Group’s operations, the first months of 2003
confirm expectations for a difficult year in terms of economic performance and
market position.
We note the continuing weakness of the advertising market, showing signs of
a downturn already in the first months of 2003 due to the unfavorable
international context. Uncertainty regarding the performance of the advertising
market for the residual part of the year does not allow at the present time to
make reliable projections on advertising revenues for the whole year.
With regards to this particular aspect, an important factor is represented by the
performance of editorial products and their related positioning.
Due to the critical moment in terms of financial resources, a continuation and
enhancement of efforts to monitor and control costs, particularly in the area of
programming, the purchase of goods and services and human resources,
appear as decisive factors for the achievement of a breakeven.
In this context, together with the budget for 2003, the Company undertook
measures and specific projects aimed at achieving savings through the
introduction of models for the development of television production, an in-depth
analysis of purchases of goods and services, a review of the Company’s
presence in the so-called connected offers, and an increase in efficiency in the
human resources area. Such action is destined to produce a stable reduction in
costs also in the years to come.
43
Proposed allocation
of net income
The Company closes the 2002 financial year reporting a net income of euro
5,032,563.79 that we propose to allocate as follows:
euro 251,628.19, equal to 5 % of net income, to be accrued to the Legal
Reserve;
O the remainder to be accrued to “Other reserves”.
O
44

Impag. civi. 5 colori ingl

Transcription

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